Finance
Which of the following best describes 'amortization'?
AIncreasing the loan balance over time
BGradual repayment of both principal and interest in equal periodic payments✓ Correct
CPaying only interest with a lump-sum principal at maturity
DA penalty for prepaying a mortgage
Explanation
Amortization is the process of gradually paying off a loan through regular payments that include both principal and interest, so that the loan balance decreases over time until it is fully paid.
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